Sony falls below 1,000 yen for first time since 1980

Sony shares tumbled below 1,000 yen Monday for the first time since 1980 and the era of the Walkman, sending the value of the company crashing to less than a tenth of what it was just over a decade ago.

The entertainment and electronics giant dropped 1.67 percent to close at 996 yen broadly in line with the benchmark Nikkei index, which shed 1.71 percent on the Tokyo Stock Exchange to a six-month low.

Tokyo followed a fall on Wall Street after dismal US jobs figures sent shivers through the financial world amid fears the global economy had caught a chill.

Dealers said Sony last traded below the psychologically important 1,000 yen level in August 1980 around a year after its landmark "Walkman" portable music player was released.

The total market value of the company is now around one trillion yen ($13 billion), compared with 11 trillion yen in 2000, the year PlayStation 2 was released and shares hit a peak of 16,950 yen, dealers and news reports said.

"Today's fall was symbolic... reflecting the present situation of the company," said Hirokazu Fujiki, strategist at Okasan Securities.

"Investors are supposed to buy shares on expectations of growth, and they have now lost confidence in the growth strategies of companies like Sony," Fujiki said. "We have yet to see the bottom of this downward spiral."

Sony's rival Panasonic hit a 32-year low on Monday, down 2.16 percent to 497 yen.

Fujiki said overseas investors appeared to be heaping pressure on the electronics giants, with domestic participants such as pension funds and individual investors still cautious about reversing the selling sentiment.

Sony posted a record full-year loss of 456.66 billion yen for the year to March 2012, while Panasonic suffered a record 772.2 billion yen loss for the fiscal year. Both were struggling with losses in their television divisions.

Japanese companies have blamed tough competition from rivals including South Korea's Samsung, falling prices, slow demand, the impact of severe flooding in Thailand last year, and the high yen for their travails.

The stronger yen hits Japanese exporters by making their products more expensive overseas, while eroding the value of foreign-earned profits.

Last month Sony said it would withdraw from a liquid crystal display joint venture with its domestic rival Sharp, which has announced an $808 million link-up with Taiwan's Hon Hai Precision.

In April, Sony said it would cut about 10,000 jobs and spend nearly $1 billion on an overhaul that its new chief executive Kazuo Hirai described as "urgent".

Sony has vowed it will swing back into the black as it embarks on the restructuring plan. The firm now forecasts a net profit of 30 billion yen in the current fiscal year to March 2013 on sales of 7.4 trillion yen.

News reports last week said that Panasonic may halve its 7,000-strong headquarters as part of a bid to streamline and turn a profit following its enormous loss.

Source: AFP

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